Employees cash out as OpenAI becomes most valuable private firm
OpenAI has completed a $6.6 billion secondary share sale, allowing eligible current and former employees to sell equity at a record-setting $500 billion valuation. The transaction, first reported by Bloomberg, confirms OpenAI’s position as the world’s most valuable privately held company, surpassing SpaceX’s $456 billion valuation.
The sale attracted major institutional investors including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price. Although OpenAI had authorized up to $10.3 billion worth of shares — up from an initial $6 billion target — only around two-thirds of that total were actually sold.
Strong investor interest despite limited participation
Sources familiar with internal discussions say the lower-than-expected participation is being interpreted internally as a strong vote of confidence in OpenAI’s long-term potential. Despite the steep valuation increase from $300 billion earlier this year, investor demand remained robust.
The offer was made in early September to current and former employees who had held their shares for at least two years. It marks OpenAI’s second major tender offer within a year, following a $1.5 billion deal with SoftBank in November.
Retention strategy amid rising AI talent war
This transaction highlights a growing trend among top startups such as SpaceX, Stripe, and Databricks, which are turning to secondary sales to provide liquidity for employees while delaying a public offering. These moves are seen as crucial tools for talent retention and employee reward, especially in the highly competitive AI landscape.
OpenAI faces increasing pressure to retain top researchers, as rival firms like Meta reportedly offer compensation packages worth hundreds of millions of dollars. The ability to offer liquidity without going public helps OpenAI remain competitive in attracting and keeping elite talent.
Strategic partners and future prospects
MGX, one of the key investors in the latest deal, expressed enthusiasm about deepening its involvement with OpenAI. In a statement to CNBC, the firm said it is “pleased to be a core partner” and looks forward to “continuing to build on its strong relationship as a significant investor across multiple funding rounds.”
This landmark secondary sale reaffirms investor belief in OpenAI’s leadership in the generative AI sector. With new funding in hand and employee equity partially unlocked, the company is well-positioned to maintain momentum amid intensifying competition and global demand for AI innovation.
